MRO Asia 3-5 November 2015, Singapore

Upgrading Your Interiors

Presented By

Norbert Marx General Manager, GAMECO

A JV between China Southern Airlines & Hutchison Whampoa (China) Ltd.

50% 50%

Our Products: Heavy Maintenance, Line Maintenance, Component Repair, Engineering, Training, Ground Support, etc.

Our approvals: More than 20, including CAAC, FAA and EASA

Our Headcount: 5,000

Our Manhours: 4.8M in 2014

Our Customers: 50+, incl. CSN, FedEx, China Postal, Asiana and CQA

GAMECO Background – Fact Sheet

Passenger expecting better cabin

experience Airline profitability improves Cabin as a differentiator in the

airline business On-line purchasing Individual IFE Wellness (humidity, lighting) Shifting demand

First Class -> reduce or remove C-Class -> upgrade Premium Eco -> new segment Eco -> high density

Periodic – 6～8 years

Growing Demand for Interior Upgrade

Interior Upgrade – Market Development

Higher demand in WB segment – Driven by higher requirements for better

passenger experience in long range travel

～60% of global demand from airlines in APAC, ME, China & India,

Source: Aviation Week

Unit: USD ‘000

Interior Upgrade – Involvements

MRO Execution Interior Design

Regulatory Authorities

Interior / Component Manufacturer

Airline

Airline completes the upgrade itself, by contracting out the Interior Design,

Component Manufacturing, Certification and MRO Execution to partners.

Airline to coordinate partners to complete the upgrade on schedule

MRO – Evolution to Integrator

Integrator

MRO Execution

Interior Design

Regulatory Approval

Contract Out

Airline

Interior / Component Manufacturing

Contract Out

Airline expectations to Integrator: Cabin identity Design Passenger experience

TAT to match with fleet operation Certification Performance & reliability

MRO Add-On Value related to Cabin Interior

MRO as usual…

Quality, TAT, Cost

Maintenance and Repair

Small modifications

Overnight Cabin Action Items

Interior or cabin modification

Cabin overhauls and refurbishments

Capabilities in design, manufacturing, certification and maintenance, etc.

Regulatory approval

Prepare and obtain regulatory approvals after upgrade or change of NAA

Obtain FAR21 Design approval, develop related STCs

Major interior design changes, upgrades and floor plan changes

Design and engineering capabilities

Interior Mock-Up Center for integrated solutions

High-end quality in cabin workshops, installation, maintenance and cleaning

Cabin interior with high level of elegance is very demanding

Easy

Medium

Difficult

Advantages Close to airline customer Strong system engineering and on-

site support Cabin experience in daily fleet

operation Customer-oriented, especially for

core customers …

Disadvantages Less experience in cabin

engineering and design Less experience in cabin electronic

or component certification Limited supply-chain More technical perspective vs.

design aspects

MRO vs Design Company – Comparison

Advantages Latest in cabin design, combining

aspects of functionality and taste Familiar with STC process Mature supply-chain Sample selection and mock-up System for Manuals, SB / AD

establishment and update in place

Disadvantages More distant from customer Broad industry coverage = less

customer-orientation Strong in product sales, weak in

after market technical and on-site support

MRO Design Company

Interior Upgrade – Examples from GAMECO

GAMECO experience in cabin upgrade includes: China Southern B777-200

fleet – F/C/Y seat upgrade & galley reconfiguration

China Southern A330 fleet cabin upgrade – F/C/Y Class

Asiana A320/330 cabin repair and modification

China Southern WB & NB fleet Premium Economy Class installation

Air Icelandic B757 seat replacement and cabin refurbishment

China Southern F & C Class lighting MOD

…

Before After

Summary

Passenger demand for high-end air travel, especially in long range routes, as well as demand for fast changing cabin electronic, is driving airlines to update their cabins more frequently

Higher profitability of airlines in recent years, especially due to lower fuel prices, allow airlines to invest more into the upgrade of their cabin interior

Due to improvements in aviation technology and greater competition in MRO business, MROs focus more on new products around the cabin

MROs need to identify ways to develop the interior upgrade business – design, engineering, certification, manufacturing, installation, testing, supply chain, after market support etc., to build their capabilities.

Thank You!